16 March 2020 Morning Session Analysis
Fed cut its interest rates to zero.
In an unprecedented move announced last Sunday, the US Federal Reserve decided to slash its benchmark interest rate to zero while launching yet another round of quantitative easing. The new fed funds rate which is used as a benchmark for both short-term lending for financial institution and as a peg to many consumer rates will now be targeted at 0% – 0.25%, down from previous range of 1% to 1.25%. US which currently facing disrupted financial market has prompted Fed to slash the rate of emergency lending for banks by 125 basis points to 0.25% while lengthening the term of loans to 90 days. On the other hand, the Fed also cut its reserve requirements for thousands of banks to zero in order to enhance domestic liquidity and promote loan borrowings. In addition, the Fed said that Bank of Canada, Bank of England, Bank of Japan, European Central Bank and Swiss National bank took action to enhance US dollar liquidity around the wold through existing dollar swap arrangements. These drastic actions were taken as coronavirus continues to spread around the globe, crippling global supply chain as well as hampering consumer spending. In the US itself, Centres for Disease Control and Prevention (CDC) reported a whopping 546 new cases in a day, bringing total number of cases to 3,626. As the US economy revolves around consumer spending and services sector, the rapidly spreading coronavirus may cripple its economy, prompting the Fed to take pre-emptive measures to mitigate or reduce recessive risks. Following the aggressive move, financial market’s initial response was fairly negative with the dollar index slumping 0.94% to 97.82 during early Asian trading session.
On the other hand, crude oil price was traded flat near $32.98 per barrel. Oil futures continues to trade within a tight price range while investors gauge the effectiveness of expansionary measures taken by several major central banks around the world which could help reduces the risks upon diminishing oil demand due to coronavirus. On the other hand, gold price skyrocketed 1.19% to $1,547.26 a troy ounce as Fed latest decision to slash its interest rate to zero prompted large selloff upon US equity and led to higher demand for the safe-haven asset.
Today’s Holiday Market Close
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Today’s Highlight Events
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Today’s Highlight Economic Data
| Time | Nation & Data | Previous | Forecast | Actual |
| 20:30 | USD – NY Empire State Manufacturing Index (Mar) | 12.90 | 4.40 | – |
Technical Analysis
DOLLAR_INDX, H4: Dollar index was traded higher following prior rebound from the lower level. However, MACD which illustrate diminishing upward momentum suggests the index to be traded lower in short-term.
Resistance level: 98.70, 99.75
Support level: 97.90, 97.35
GBPUSD, H4: GBPUSD was traded higher following prior rebound from the lower level. MACD which illustrate diminished downward momentum suggests the pair to be traded higher in short-term as technical correction.
Resistance level: 1.2550, 1.2735
Support level: 1.2290, 1.2170
EURUSD, H1: EURUSD was traded higher following prior rebound from the lower level. MACD which illustrate bullish signal suggests the pair to be traded higher in short-term.
Resistance level: 1.1170, 1.1285
Support level: 1.1080, 1.0925
USDJPY, H1: USDJPY was traded lower following prior retrace from the higher level. MACD which illustrate bearish signal suggests the pair to be traded lower in short-term as technical correction.
Resistance level: 106.70, 108.00
Support level: 105.40, 103.80
AUDUSD, H4: AUDUSD was traded lower while currently testing at the support of 0.6175. MACD which illustrate bearish signal suggests the pair to extend its losses after closing below the support level.
Resistance level: 0.6300, 0.6450
Support level: 0.6175, 0.6050
NZDUSD, H4: NZDUSD was traded lower following prior retrace from the higher level. MACD which illustrate bearish signal suggests the pair to extend its losses in mid-term.
Resistance level: 0.6100, 0.6200
Support level: 0.6000, 0.5870
USDCAD, Daily: USDCAD was traded lower following prior retrace from the higher level. MACD which illustrate diminished upward momentum suggests the pair to be traded lower in short-term as technical correction.
Resistance level: 1.3940, 1.4125
Support level: 1.3685, 1.3520
USDCHF, H1: USDCHF was traded lower following prior retracement from the resistance of 0.9545. MACD which illustrate bearish signal suggests the pair to extend its losses in short-term as technical correction.
Resistance level: 0.9470, 0.9545
Support level: 0.9385, 0.9320
CrudeOIL, H1: Crude oil price was traded lower while currently testing at the support of 30.00. MACD which illustrate bearish signal suggests its price to extend its losses after breaking the support level.
Resistance level: 33.00, 35.65
Support level: 30.00, 27.55
GOLD_, Daily: Gold price was traded lower following prior retrace from the higher levels. MACD which illustrate bearish signal suggests its price to extend its losses after breaking the support at 1541.20.
Resistance level: 1603.15, 1635.45
Support level: 1541.20, 1491.10